Digital filing cabinet

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14 April 2015

Planned Departure 200By Komal Joshi of Legal Futures associate Planned Departure

What would you rather have: all your files and records stored neatly away in filing cabinets, desk drawers, shelf racks and document boxes, or digitised and stored in a virtual filing cabinet (the Cloud) that can be accessed from anywhere, not just in your office?

Some from the “old school” will prefer the former but most will, no doubt, choose the latter. Online data storage services are rapidly becoming the preferred method for storing important material.

Amongst many other things, the digital era has heralded fast bandwidth, mobile computing and inexpensive and abundant online storage, all of which have radically changed the way we live and work.

Having important files and documents stored on a virtual server means that staff needing to access this material are no longer limited by location. Provided there is an Internet connection they can work from anywhere. It also means that they can share files efficiently with others.

The opponents of online data storage services will argue that the treat of a cyberattack is a major issue when using remote servers. Protagonists, on the other hand, will point out that cybercriminals are a continuous threat to everyone, irrespective of whether firms use inhouse or remote servers. However, since cloud-based organisations will generally have people whose sole focus is data security, this should not be a major issue.

Furthermore, champions of online data storage will also argue that firms that use physical devices to back up their computers put their data at risk. In virtually every case the process is manual.

That said, opponents do have a valid point on one very important issue: digital asset legacy. With hard-copy records, virtually everything is traceable. But that may not be the case with digital assets.

Online subscriptions, for example, may continue to accrue charges if the owner of such subscriptions dies and leaves no record (or no easily accessible record) for others to act on.

Online bank accounts can also be at risk in the event the holder of the account dies or becomes permanently incapacitated. Whilst any funds in the account are unlikely to be lost, the bank could close the online facility on notification of the holder’s death. This could make things very difficult for firms using online banking in the running of the business, particularly where the account was established by one person registering their username and password.

With many of us today having several online accounts with different service providers, accessing and storing data on several devices – laptops, smartphones, tablets etc – our digital trail can be long. With technology advancing faster than the formulation of new laws that address the issue of digital property, these assets may not necessarily comply with the same legal characteristics as physical assets.

A positive step is to ensure proper care is taken over their protection, not by including them in a Will (which can be awkward given, amongst other reasons, the often rapidly changing nature of digital assets) but by developing a specific digital estate plan and registering that plan with a digital estate management organisation.

For those not taking proper care of their digital legacy, Woody Allen’s quip might be highly relevant: “This year I’m a star, but what will I be next year? A black hole?”

Associate News is provided by Legal Futures Associates.
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